While speaking in Dubai during the Binance Blockchain Week 2022 conference, Jag Sidhu, Syscoin Foundation President, announced an initiative to set a new standard for Decentralized Autonomous Organizations (DAOs). The Syscoin Foundation has embarked on a project that represents what they see as a significant evolutionary step for DAO technology that can breathe new life into the segment. The group also aims to bring forward the first implementation of their revolutionary new model in 2022.
Up till now, DAOs have been universally affected by key issues and have failed to reflect the ethos of cryptocurrency. The fundamental value proposition of cryptocurrency is self-sovereign capital. ‘Not my keys, not my coins.’ Currently, DAOs take ownership of users’ capital by managing it in a treasury controlled by a few individuals. Much like not being able to control the keys to your own wallet. Moreover, the current governance solutions are not suited to respecting stakeholder values. Typically governance does not directly control the protocol, it simply acts as an advisory vote to signers on the multi-sig controlling the treasury. This is further compounded by the typical disconnect between a DAO governance token and the protocol’s actual value proposition.
DAOSYS aims to solve these issues with a revolutionary model for coordinating cryptocurrency as capital investments. The Syscoin Foundation’s view is that DAOs should operate more like pure AMMs; an autonomous and permissionless protocol anyone can use to consume the services of the DAO, effectively acting as autonomous economic agents. This means that DAOs have to mature from the current phase of maximizing capital extraction. The economics must be tailored to facilitate the DAO’s mission statement and be implemented in a manner that does not require external controls.
Prior to this initiative, it was nearly impossible to establish a proper DAO with the state of smart-contract and DeFi design. But, by iterating on the AMM model to generalize the process, it’s possible to deploy DAOs as easily as a liquidity pool. By applying antifragile tokenomics and integrations with DeFi protocols, a treasury management platform can be realized without the need for a governance token. The DAOs of the future can leverage existing markets as the foundation for coordinating capital to execute mission statements. This technology – the Autonomous Service Engine – is present in DAOSYS.
DAOSYS will consist of a reference architecture using the Autonomous Service Engine to make Syscoin a hotbed of innovation through self-sovereign asset management. The antifragile market design results in a risk-mitigating funding mechanism. This shifts the primary risk in funding new projects and initiatives toward simple opportunity cost, leading to some incredible efficiencies for the Syscoin Foundation’s treasury and for others who participate. DAOSYS will be advantageously positioned to foster digital value from the roots, upward, because it is oriented to drive the advancement of Syscoin’s ecosystem, a full-stack Layer 1 blockchain with a modular design that supports a scalable Layer 2.
This initiative and its DAOSYS implementation are part of a larger goal of the non-profit Syscoin Foundation, to provide the advancements necessary for DAO technology to disrupt for-profit corporate and NGO finance by becoming a go-to driver of innovation.